Brick & Mortar businesses' response has been to cut back selection. Just TRY to find good precision screwdrivers locally, for example. Sears, Home Depot, Lowes, smaller hardware chains, etc - no dice. Frys has some decent sets but they're not here in the northeast so they aren't an option.
That's because retail space is expensive. So the stores have to basically sell through volume in order to compete with the likes of Amazon. So they'll only stock the most common items people buy in large quantity. Chances are most shoppers are online-savvy so more niche items like precision screwdrivers will be online only rather than occupy a bit of the shelf that they could use to sell something that moves quicker.
The savings from not having a B&M location mean cheaper prices (sure there's a warehouse, but a warehouse can be located in a cheaper area, often where shipping infrastructure is good versus easy accessibility for customers). Sure there's shipping but if you ship enough and have a warehouse near the shipping center, your costs are very low
Back in the day when the only way to get stuff is your local store, carrying a lot of stuff made life convenient. Now that everyone is shopping online anyways, as s store your best bet is to optimize for stuff that moves and that people need to buy repeatedly (like consumables).